Earlier this year, the Interactive Advertising Bureau (IAB) wrote about “the future of mobile game advertising.” They highlighted top grossing app success stories, pinning down three key trends fueling mobile game monetization: increased user adoption of mobile devices, the mobile app ecosystem is maturing, and the growing willingness of users to consume virtual goods and mobile ads.
Trend 1: Increased user adoption of smartphones and tablets
According to the IAB, “as of January 2014, 57% of all US adults owned a smartphone and 44% owned a tablet.” The preferred device for iOS gamers is the iPad, while Android users play on their phones – most likely because Android phones have a higher average screen size.
Trend 2: The mobile app ecosystem is maturing
The mobile app ecosystem is becoming increasingly sophisticated as the industry works together to form better standards for advertising, monetization, and development. We’re also seeing more leadership from platform providers dealing with problems like device and operating system fragmentation.
Trend 3: Growing willingness to consume virtual goods and mobile ads
Mainstream hits like Supercell’s Clash of Clans and King’s Candy Crush Saga have shown users the entertainment value of making in-app purchases, so users have become more willing to spend real money in apps. Policies banning spammy ad formats have made it easier for developers to choose ad platforms that consider the user experience of their games, so consumers are getting better ad experiences. As a result, users are much more accepting of mobile ads than they were a few years ago.
Brands recognize that gamers aren’t just geeks anymore – we are all gamers
Having more users on more devices willing to engage with mobile ads, brand advertisers have been convinced to shift their spending to mobile games. For the first time, this year “more money will be spent on mobile ads than newspapers, magazines, and radio” (Pando Daily). The IAB even stated, “mobile game integration has become an industry standard for marketers.” Developers have noticed too; almost all of the top grossing mobile games on the Apple App Store and Google Play are currently free to play.
Experts predict mobile game monetization will continue to increase through 2017. According to Susan Borst, Director of Industry Initiatives and the IAB lead for the Games Committee, “interest in game advertising has never been higher.”
Rewarded native ads are a win, win, win
Not only are mobile games leading in ad spend, they’re leading in design. Joe Lazlo, Senior Director of the IAB Mobile Marketing Center of Excellence said, “successful game advertising has much to teach the rest of the mobile ecosystem.” Simply stated, players are becoming more receptive to ads because ads are getting better. “From advertising that offers player rewards, value exchange video advertising, rich media creative, branded content and more native integration—ads in games are becoming less aggravating—and more frictionless.” Additionally, “emotional targeting that is additive to game play tapping into players’ emotions and serving ads in the right place at the right time with the right message is a win for both advertisers and consumers.”
Driving mobile game monetization
NativeX has been fighting the good fight for years, showing developers and their users that ads don’t have to be disruptive to the user experience and that ads can actually enhance the user experience of mobile games. For instance, our deep linking ad format (as shown below) was designed to drive in-app purchases. It’s a multi-offer advertisement served to players during natural breaks in gameplay. When the ad appears, players can select from two options: 1) connect through a deep link to a mobile gameplay; or 2) engage with an ad in exchange for free virtual currency or game items.
In customer trials, 10% of players shown the deep linking ad format clicked through to the games’ in-app store to make purchases. As a result, players have become more familiar with rewarded ads AND in-app purchases; so developers are making more money and the consumption of advertisements is a positive experience for users.
To learn more about how NativeX is creating value for game developers by taking a holistic approach to monetization, check out our monetization solutions page or tune in on Twitter, LinkedIn, or Facebook.